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Beyond Exports: How China’s Manufacturing Networks Are Going Global

Chinese companies are adding factories abroad while overseas production remains closely connected to Chinese machinery, components, materials and suppliers.

Industry InsightsEnglishEngiFind EditorialAug 26, 2026For Global Readers
Beyond Exports: How China’s Manufacturing Networks Are Going Global cover image

What recent reporting reveals about factories, suppliers and intermediate goods

EngiFind research note: This public Insight is adapted from a more detailed EngiFind member report.

Exports still matter. But they no longer tell the whole story of Chinese manufacturing.

For this article, EngiFind reviewed recent reporting by The Economist, the Financial Times, The Wall Street Journal, Reuters, Fortune and the South China Morning Post. The coverage points to a broader pattern: Chinese companies are adding manufacturing capacity abroad, while many of those overseas factories remain closely linked to Chinese machinery, components, materials and suppliers.

The central observation: This is not a simple, linear relocation of manufacturing away from China. It is the extension of Chinese manufacturing networks into more countries, alongside continued growth in China’s role as a supplier of intermediate and capital goods.

1. Overseas factory investment has accelerated

The Economist estimated in August 2026 that Chinese companies had spent more than $200 billion on factories abroad over the previous three years. It described three changes: a wider geographic spread of production, deeper overseas supply chains as suppliers follow manufacturers, and a stronger concentration in strategic industries such as electric vehicles, clean energy and data-centre equipment.

The destinations now span Southeast Asia, Europe, North Africa, the Gulf and Latin America. The Economist highlighted industrial nodes ranging from Egypt’s Suez Canal Economic Zone to Hungary, Saudi Arabia, Brazil and Indonesia. The Wall Street Journal similarly described Chinese-owned or Chinese-backed production in products ranging from appliances to automobiles across several continents.

2. Europe provides the clearest investment data

According to MERICS and Rhodium Group, completed Chinese foreign direct investment in the EU and the UK reached €16.8 billion in 2025, up 67% year on year. Completed greenfield investment—investment in newly built facilities—rose 51% to a record €8.9 billion.

The automotive sector received €7.6 billion, and 93% of that amount went into the electric-vehicle supply chain. Hungary remained the largest European destination, while major battery projects also moved forward in Spain, Portugal and Slovakia. Outside the EU, the Financial Times reported that BYD’s $1 billion plant in Turkey is designed for annual capacity of 150,000 vehicles and around 5,000 jobs.

There is also an important qualification. Newly announced Chinese greenfield projects in Europe fell to €5.2 billion in 2025, from €5.7 billion in 2024 and €16.9 billion in 2023. Record completed investment and a weaker pipeline can coexist: the first reflects previously announced projects entering construction, while the second describes the flow of new commitments.

3. Suppliers are following manufacturers

The expansion is increasingly visible beyond lead manufacturers. The South China Morning Post reported on a Guangdong producer of chemicals used in automotive and furniture coatings that opened a factory near Ho Chi Minh City after existing customers moved production to Vietnam. The logic was direct: following customers helped preserve established supply relationships.

Morocco offers a larger industrial example. Reuters reported that the Sino-Moroccan company COBCO started production of lithium-ion battery materials in 2025. The $2 billion project targets annual output equivalent to 70 GWh, enough for roughly one million vehicles. Other Chinese companies are developing battery and battery-material projects in the country, building on Morocco’s automotive base, trade links, resources and proximity to Europe.

4. More overseas assembly does not mean fewer links to China

The Wall Street Journal, citing a McKinsey Global Institute analysis of Chinese customs data, reported that China’s exports of intermediate goods rose 25% year on year in the first five months of 2026. Capital-goods exports increased 12%, compared with 4% growth in consumer goods.

Fortune reported a similar pattern for 2025: Chinese consumer-goods exports fell 2%, while intermediate-goods exports rose 9%. The reporting periods and definitions differ, but both datasets point in the same direction. A product may be assembled in Southeast Asia, Europe, North Africa or Latin America while still incorporating Chinese components, industrial equipment, batteries or production systems.

5. Tariffs matter, but they are only part of the explanation

The Financial Times and Reuters have documented how US and European tariffs influence production decisions. Some exporters have accelerated offshore projects, while automakers have considered local production, partnerships or different product mixes.

Other factors appear repeatedly across the coverage: weak demand and intense competition in China, the search for new markets, proximity to customers, regional trade arrangements, and the movement of existing clients. The same pressures do not produce a single corporate strategy. Some companies build greenfield plants; others use joint ventures, contract manufacturing or partnerships; many continue to rely primarily on exports.

A more distributed, still connected manufacturing system

Taken together, the reporting describes a manufacturing system that is becoming geographically more distributed without becoming disconnected from China. New factories and industrial clusters are appearing across multiple regions. At the same time, China is supplying a growing share of the machinery, intermediate goods and technical inputs used by factories around the world.

The result is not a clean replacement of one manufacturing centre by another. It is a denser network of production nodes, investment flows and supplier relationships that continues to evolve under the combined influence of markets, industrial capabilities and trade policy.

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Sources

  1. The Economist (republished by Hindustan Times) (2026-08-20), [Chinese firms are wrapping their supply chains around the globe](https://www.hindustantimes.com/world-news/chinese-firms-are-wrapping-their-supply-chains-around-the-globe-101787212223980.html).
  2. The Wall Street Journal (2026-05-29), [China Is Exporting Its Factories Across the World and Spooking the Competition](https://www.wsj.com/business/autos/china-is-exporting-its-factories-across-the-world-and-spooking-the-competition-39e63291).
  3. The Wall Street Journal (2026-08-07), [China’s New Export Engine: Supplying the Factories of the World](https://www.wsj.com/economy/trade/chinas-new-export-engine-supplying-the-factories-of-the-world-b8f1c176).
  4. Financial Times (2025-02-03), [China’s exporters to step up offshoring to beat Donald Trump’s tariffs](https://www.ft.com/content/71950f26-8272-4710-b3cc-72ad1007d77f).
  5. Financial Times (2024-07-08), [BYD agrees $1bn deal to build electric vehicle plant in Turkey](https://www.ft.com/content/248743c8-0f97-4d26-85c5-28ebbf9bc327).
  6. Financial Times (2025-03-05), [Europe’s clampdown on Chinese EVs forces U-turn at state-owned GAC](https://www.ft.com/content/bb29e176-5efc-46ab-92d5-7f87b2a906cd).
  7. Reuters (2024-11-10), [Southeast Asia prepares for factories fleeing Trump tariffs on China](https://www.reuters.com/world/asia-pacific/southeast-asia-prepares-factories-fleeing-trump-tariffs-china-2024-11-08/).
  8. Reuters (2025-04-08), [Tariffs take toll on Chinese exporters](https://www.reuters.com/markets/its-like-throwing-darts-blindfolded-tariffs-take-toll-chinese-exporters-2025-04-08/).
  9. Reuters (2026-05-18), [Chinese greenfield investment in Europe reaches new record](https://www.reuters.com/world/china/chinese-greenfield-investment-europe-reaches-new-record-newspaper-reports-2026-05-18/).
  10. Reuters (2025-06-25), [Sino-Moroccan COBCO begins producing EV battery materials](https://www.reuters.com/world/africa/sino-moroccan-cobco-begins-producing-ev-battery-materials-2025-06-25/).
  11. Fortune (2026-03-20), [China is becoming a ‘factory to the factories’](https://fortune.com/2026/03/20/china-factory-to-the-factories-component-exports-asean-supply-chains-geopolitics/).
  12. South China Morning Post (2025-12-03), [Factory of factories: China’s manufacturers join wave of overseas expansions](https://www.scmp.com/economy/china-economy/article/3334925/factory-factories-chinas-manufacturers-join-wave-overseas-expansions).
  13. South China Morning Post (2026-01-28), [Partnerships, not plants: Chinese companies rethink overseas expansion strategy](https://www.scmp.com/business/article/3341479/partnerships-not-plants-chinese-companies-rethink-overseas-expansion-strategy).
  14. MERICS / Rhodium Group (2026-05-20), [Chinese Investment in Europe Rises to Seven-Year High: Chinese FDI in Europe 2025 Update](https://rhg.com/research/chinese-investment-in-europe-rises-to-seven-year-high-chinese-fdi-in-europe-2025-update/).

Cover image: Kurt Cotoaga / Unsplash, [Port Cranes in Action](https://unsplash.com/photos/red-and-blue-crane-under-blue-sky-during-daytime-MP6FMO8khn4), used under the Unsplash License. Information updated to 25 August 2026.